AMD is under attack by Bernstein analyst Stacy A. Rasgon, who argues that the recent bonuses awarded to the senior management team are "extremely distasteful" in light of AMD's poor business performance.
The equity awards were approved by AMD's Board of Directors on August 5th and were made public Tuesday evening via an 8-K filing: they include a mix of performance-based restricted stock, time-based restricted stock, and stock options.
The compensation scheme includes awards with a target value of $2 million each for Devinder Kumar, AMD's CFO, Forrest E. Norrod, general manager of the enterprise, embedded and semi-custom business group, and Mark Papermaster, the firm's CTO. On August 6th, the Board also approved equity awards with a target value of $6 million for CEO Dr. Lisa Su.
The size of the bonuses are similar to those award in August 2014. Rasgon notes the large bonuses are "unbelievable" given the round of layoffs earlier this year and the evolution of AMD's financial condition over the past year:
However, these awards could be part of the company's retention plan, given that the analyst does not believe that the management team needs to be rewarded for performance at this stage.
However, CFO Devinder Kumar and CTO Mark Papermaster have already been awarded retention bonuses in January 20, while GM of EESC Forrest Norrod and CEO Lisa Su took over their position less than a year ago.
The analyst believes that the size of these grants indicate that the management and the Board of Directors do not have the interests of the shareholder at heart, while viewing these grants as a sign that things are continuing to worsen at AMD.
Rasgon maintains an underperform rating for AMD and a price target of $1.50.